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OTT Platforms in 2022: Case Study

Over-the-top media firms such as Netflix, Amazon Prime, and Hulu are transforming the coopetition relationship among media firms in the broadcasting market and the structure of the broadcasting industry. New entrants like OTT media firms kept using various coopetition strategies including mergers and acquisitions in order to gain a foothold in the firmly entrenched broadcasting industry. A few OTT media firms already successfully made inroads into the media industry and are expanding their turf in many countries like India for example, triggering drastic changes in the structure of the broadcasting industry. The entry of OTT firms has also been increasing tension with fixed and mobile broadband network operators worldwide and induced NOs to become OTT media firms themselves. In this paper, we propose an empirical study on the major countries with large broadcasting market size.

This paper shows that OTT services in major countries having the huge TV market commonly use “localization strategy”, “partnership strategy”, “content differentiation strategy”, “revenue enhancement strategy”, and “service optimization strategy”. Add to these strategies, pay-TV incumbents use “envelopment strategy” and “diversification strategy” as well. In addition, OTT service revenues and fixed broadband subscriptions by major countries are set as independent variables, and the herfindahl-hirschman index of pay-TV market, which measures the market concentration, and the ratio of households subscribing to pay-TV services by major countries are set as dependent variables. Considering different characteristics of broadcasting market of each country, public funding, subscription revenue, advertising revenue, IPTV, satellite broadcasting platform, and cable broadcasting platform are set as dummy variables for applying the least square dummy variable analysis.

As a result, it turns out that the increase in fixed broadband subscriptions has a statistically significant impact on the increase in the pay-TV market concentration and the cord-cutting phenomenon, but OTT service revenues do not affect.

The entry of OTT firms has also been increasing tension with fixed and mobile broadband NOs and induced NOs to become OTT media firms themselves. It would not be possible for OTT media firms to make inroads into the entrenched media industry without broadband networks. Nowadays many upcoming Telugu movies on OTT 2022 already lined for oTT release. The tension between OTT firms and broadband network operators are ever increasing, as manifested by net neutrality debates and policies. Thus this paper questions what kinds of strategies are being adopted by the new entrants and the incumbents in the reality by examining several key advanced countries in terms of TV revenue. The passage of the Telecommunications Act of 1996 in the U.S. showed us well how a sudden change of institutional factor could affect the whole structure of the broadcasting market. The act specified about deregulation allowing the cross-ownership between telephone and cable operators. After the passage, a host of mergers and acquisitions occurred following the merger of US West and Continental Cablevision Inc. This merger case happened with the both sides’ expectations for: revenue diversity, market power of programming, and the integration of video, voice, and data communications (Tseng & Litman, 1998).

Netflix launched a relatively low-priced service plan (basic: 7.99 euros per month) in 2014 when it entered the German market in order to increase profits by expanding its subscribers. Amazon users were able to do online shopping and use music, book, TV, movie, and other contents via Amazon Prime ($ 99 per year), but in 2016, Amazon launched Amazon Prime Video platform supplying TV and movie contents only (minimum $ 8.99 per month). If we convert the monthly rate to the annual rate, we could see that the total price rose rather than down (8.99 × 12 = $ 107.88). For its service optimization strategy, Netflix introduced work curation and recommendation functions. Amazon Video introduced the ability to download video contents in 2015 and also initiated 4K high-definition streaming service. In 2016, it launched a platform called Amazon Video Direct that allows content creators to upload their own contents. In addition, existing mainstream operators have similarly used “partnership strategy”, “content differentiation strategy”, “revenue enhancement strategy”, “service optimization strategy”, “envelopment strategy”, and “business diversification strategy”

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